As far as I'm concerned, any Democrat who says that this victory is not a major wake-up call to Democrats everywhere is either lying or delusional.
Scott Brown ran bluntly and unapologetically against President Obama's agenda in Massachusetts and he won a clear and not very close victory. Massachusetts is the state in which Republicans are a distinctive minority. By some accounts almost 25% of Democrats who voted in the election voted for Scott Brown, in Massachusetts. These Democrats didn't stay home, they crossed the line. Ponder that for a minute.
There is no way to spin this win for the Democrats. Coakley may not have been the best candidate we've ever seen, but a month ago, she was up by 20 points. The implications of this election (and the Virginia and New Jersey gubernatorial elections) are fairly clear. First, the White House will either tack to the middle or else it is going to be a long 2010 and 2012 for those of us who would rather see Democrats in power than Republicans. Tacking middle may not be my ideological preference, but it is politically necessary. By the way, I don't think the President's plan to tax the big banks counts. Bank bonuses may not be popular but I think the public is going to see the move as pandering and insincere. While the President still has credibility with the American public, this might be the time to publicly say message received, let's hit the reset button. As heretical as this is to say, it might be time to put health care reform on hold and focus on jobs. If the President is starting to lose weak Democratic identifiers to the Republican Party (and he's pretty much lost the independents), it's not his base that he should be worrying about.
Second, the Republicans may have found their candidate for 2012 in Scott Brown. With a bit more polish, he might be ready for a run for 2012.
Third, the Republicans may also have found their slogan: "we can do better." The question is whether they really can or at least convince the American people that they can.